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Wednesday, September 17, 2008

Offshore drilling up to Senate after House passage

WASHINGTON – Sept. 17, 2008 – Offshore oil drilling, which has dominated energy debates in the U.S. presidential campaign, is now coming to the Senate.

The House late Tuesday approved on a 236-189 vote legislation that would open waters 50 miles (80 kilometers) off the Pacific and Atlantic coasts to oil and natural gas development - if the adjacent states agree to go along.

The legislation now goes to the Senate, where Democratic leaders are expected to mold it to their liking in the next few days.

So far, the Senate has indicated it has no intention of going as far as the House in expanding offshore oil and gas drilling beyond the western Gulf of Mexico, where energy companies have been pumping oil and gas for decades.

At least two proposals being crafted in the Senate would allow drilling in some areas along the southern Atlantic from Virginia to Georgia. But the Pacific and remainder of the Atlantic seaboard would not be affected.

Senate Majority Leader Harry Reid, a Democratic, also has said he would make way for a vote on a broader Republican drilling proposal that would allow states to opt for offshore exploration from New England to the Pacific Northwest and share in the royalties that are collected.

Congress has renewed bans on drilling off the Atlantic and Pacific coasts and the eastern Gulf of Mexico off Florida annually for the past 26 years.

But expanded offshore drilling has become a mantra of Republican energy policy that has been felt in both presidential and congressional campaigns, even though lifting the drilling ban would have little if any impact on gasoline prices or produce any more oil for years.

Republican presidential nominee John McCain vowed at the recently concluded Republican convention to push for new offshore oil and natural gas drilling as delegates chanted "drill, baby, drill." His Democratic rival, Barack Obama, also has said he supports more drilling as part of a broader energy package.

But in the Senate the issue of drilling remains divisive.

No matter what the proposal, it is expected to face a filibuster and no one has yet to predict with certainty that any drilling bill will garner the 60 votes needed to overcome such a roadblock.

The drilling measure passed late Tuesday in a largely party-line vote by the House is unlikely to survive the Senate.

President George W. Bush, who has called for ending the offshore drilling bans, signaled he would veto the legislation if it reached his desk, arguing that it would stifle offshore oil development instead of increasing it.

House Speaker Nancy Pelosi, a Democratic, called the bill "a new direction in energy policy ... that will end our dependence on foreign oil" by shifting federal subsidies from promoting the oil industry to spurring development of alternative energy sources and energy efficiency.

The House measure would allow drilling in waters 50 miles (80 kilometers) from shore almost everywhere from New England to Washington state as long as a state agrees to go along with energy development off its coast. Beyond 100 miles (160 kilometers), no state approval would be required. The drilling ban would remain in the eastern Gulf of Mexico.

But Republicans called the drilling measure a ruse to provide political cover to Democrats feeling pressure to support more drilling at a time of high gasoline prices.

"How much new drilling do we get out of this bill? It's zero. Just zero," declared House Republican leader John Boehner of Ohio. "It's a hoax on the American people. This is intended for one reason ... so the Democrats can say we voted on energy."

The bill would not share royalties from energy production with the adjacent states, which Republicans said would keep states from accepting any new drilling off their beaches. Republicans also cited Interior Department estimates that 88 percent of the 18 billion barrels of oil believed to be in waters now under drilling bans would remain off-limits because they are within the 50-mile (80-kilometer) protective coastal buffer.

The House-passed bill calls for rolling back nearly $18 billion in tax breaks over 10 years for the five largest oil companies and using the revenue for tax incentives to help commercialize alternative energy such as solar, wind and biomass, and programs that foster energy efficiency.

The bill also would require the president to make available oil from the government's Strategic Petroleum Reserve. Pelosi said such a move is needed to drive down gasoline prices, although oil prices have dropped dramatically in recent weeks and many energy experts believe gasoline prices will fall as well after refineries recover from Hurricane Ike.

Democrats added a provision at the last minute that makes it a federal crime for oil companies with federal leases to provide gifts to government employees, a response to a recent sex and drug scandal involving the federal office that oversees the offshore oil royalty program and energy company employees.

The House bill also would:

Provide tax credits for wind and solar energy industries, the development of cellulose ethanol and other biofuels.

Require utilities nationwide to generate 15 percent of their electricity from solar, wind or other alternative energy sources.